Alibaba's Taobao Is Once Again Branded A 'Notorious Market' For Counterfeit Goods

Alibaba Executive Chairman Jack Ma with his hands up at the World Economic Forum (WEF) on January 24, 2018 in Davos, eastern Switzerland. / FABRICE COFFRINI/AFP/Getty Images

Jack Ma, the founder and CEO of Alibaba, has entrenched himself in the position that he is an avid fighter of counterfeits and has repeatedly demanded Beijing to take a hard line towards fakes, even going as far as to recommend throwing counterfeiters in jail in early 2017. Despite this, Alibaba's Taobao marketplace has once again been classified by the Office of the United States Trade Representatives as a "Notorious Market," a designation for the world's biggest violators of IP, trademark, and copyright law, sitting on the list right next to thepiratebay.org.

“A high volume of infringing products reportedly continue to be offered for sale and sold on Taobao.com and stakeholders continue to report challenges and burdens associated with IP enforcement on the platform,” a USTR statement noted.

Craig Crosby of The Counterfeit Report -- a consumer advocacy firm that is spearheading the fight in the U.S. against counterfeits -- feels that Alibaba's "notorious" destination is well deserved and jested at the appropriateness of Jack Ma's company being named after the fable “Ali Baba and the 40 Thieves.”

"The counterfeits remain, consumers are deceived, and manufacturers and retailers are being harmed in a big way with little recourse," Crosby wrote about Alibaba in a recent press release, claiming that the platform, "facilitate[s] and enable[s] distribution of counterfeits throughout the world. In fact, it’s Alibaba who can’t knock off the knockoffs, and enforcement action should be directed at Ma."

In 2016, Alibaba boasted that it took down 380 million products and closed 180,000 stores on Taobao.com for selling counterfeits and in 2017 the number of store closings rose to 240,0001.

"Alibaba purports to be on a mission to fight the rampant counterfeiting problem on its platform, and make it easier for brands to remove fakes, but that's also not true," Crosby wrote. "Alibaba's "AliProtect" counterfeit enforcement program presents a gauntlet of obstacles, cryptic conflicting instructions, and absurd responses to rights holder's notifications."

Crosby goes even further, claiming that he was denied refunds for test purchases of confirmed counterfeit products and expressed that Alibaba "doesn't even have telephone customer or intellectual property infringement support. Calls to U.S. Corporate Headquarters ... go unanswered, are disconnected, or instruct that a message be left. Alibaba emails that request information or documents state "Please do not reply to this email/message. This mailbox is not monitored and you will not receive a response" and users are directed to an Alibaba web-form that won't accept document files."

Crosby can back up his bold statements with direct experience, as his firm has identified and removed over 18 million infringing items on Alibaba's websites on behalf of rights holders. He approaches counterfeits as a law enforcement agent would, processing, cataloging, and archiving them to be used in court.

"Every item we purchase is bagged and tagged as evidence, every transaction is captured, every screenshot is captured," Crosby explained to me in an interview. "Just a monumental accomplishment to support the allegations that are in the press releases."

While Jack Ma insists that the sellers of counterfeits should be jailed, he continues to directly profit off of them. In March of 2017, he wrote a statement to China's parliamentary delegates which stated that, "The majority of counterfeiters are not held legally responsible for their actions." This is something that Ma should know better than anyone else.

However, the counterfeit problem is not reserved to China, as Chinese-made counterfeits are finding their ways onto American e-commerce platforms en masse. According to Payoneer, 62% of China’s online vendors are now on Amazon, with 91% of them selling to the United States. According to research by Marketplace Pulse, Chinese sellers now make up 25% of the merchants selling on Amazon U.S. and potentially a quarter of Amazon’s global marketplace.

However, if the Office of the United States Trade Representative finds Alibaba to be a "Notorious Market," they may want to take a look in their own backyard. If they were to do so they'd more than likely find a certain company run by the current richest man in the world who is perhaps one of the most blatant traffickers of counterfeit goods that has ever been known, where massive quantities of Alibaba fakes end up being directly sold and drop-shipped with impunity.

I'm the author of Ghost Cities of China and have been traveling perpetually since 1999 -- through 88+ countries. I can often be found in some new city or somewhere along the New Silk Road.